Time Series Forecast (TSF)
The Linear Regression Line That Peeks Into the Future
The Time Series Forecast (TSF) takes the least-squares best-fit line from the last N price bars and boldly extends it forward – usually one bar ahead, sometimes more. It's basically the endpoint of the Linear Regression Indicator, but projected into tomorrow instead of sitting on today. Think of it as your statistical crystal ball: if the current trend were to continue linearly, here's where price 'should' be next. Great for forecasting short-term direction, building adaptive channels, or spotting when price deviates from its expected path.
How TSF Works – Regression With a Forward Leap
Simple extension of linear regression:
- Fit least-squares line over last N bars: price = slope × index + intercept.
- Current regression endpoint = value at newest bar (index N).
- TSF = endpoint projected forward (usually index N+1): TSF = slope × (N+1) + intercept.
Each new bar recalculates the line and pushes the forecast ahead – a rolling 'expected price' one step into the future.
Many platforms let you set projection steps – 1 is standard, more for longer forecasts.
Reading the Forecast Line
Key signals:
- Price > rising TSF: Strong momentum – price beating expectations.
- Price < falling TSF: Weakness – failing to keep projected pace.
- Price hugging TSF: Trend on autopilot – steady continuation.
- Price crossing TSF: Potential shift – deviation from expected path.
Because it's forward-looking, TSF often leads price slightly in trending markets.
Practical Trading Setups
Proven ways to use it:
- Trend continuation filter: Only take longs when price > TSF and TSF rising; shorts when below and falling.
- Deviation plays: Price far above TSF in uptrend → overbought, consider profit-taking; far below → potential bounce.
- Forecast channel: Plot TSF ± k×standard error or ATR for dynamic future S/R bands.
- Crossover trigger: Price crossing above falling TSF → early reversal warning.
Pair with volume – beating forecast on strong volume = conviction.
Tuning the Look-Back and Projection
Parameters matter:
- Short N (10–30): Responsive forecast – good for intraday, but noisy.
- Medium N (40–80): Balanced swing projection – reliable continuation reads.
- Long N (100+): Smooth macro forecast – filters noise on higher timeframes.
- Projection steps: 1 for tight, 3–5 for longer-term 'target' lines.
Strengths and Realistic Limits
The Wins
- Forward-looking edge – anticipates continuation before price confirms.
- Statistically clean – pure least-squares projection.
- Versatile for channels, deviation trades, and trend filters.
Limitations
- Assumes linear continuation – curved or reversing markets mislead.
- Sensitive to N and outliers in the window.
- Still lags major regime shifts – forecast based on past trend.
Your TSF Setup Checklist
- Match N to timeframe and asset volatility.
- Plot alongside current regression line for context.
- Test deviation and crossover rules historically.
- Add momentum/volume confirmation – avoid blind faith in forecast.
- Use for bias and targets, not standalone in choppy ranges.
Key Takeaways
TSF extends the regression line forward – your statistical 'expected price' tomorrow.
Price beating rising TSF = strong trend; lagging = potential weakness.
Great for continuation filters, deviation plays, and projected channels.
Tune N carefully – shorter for speed, longer for calm.
Combine with confirmation tools – let TSF guide your expectations while managing risk tight. Stay projected and trade smart!
Time Series Forecast (TSF)
The Linear Regression Line That Peeks Into the Future
The Time Series Forecast (TSF) takes the least-squares best-fit line from the last N price bars and boldly extends it forward – usually one bar ahead, sometimes more. It's basically the endpoint of the Linear Regression Indicator, but projected into tomorrow instead of sitting on today. Think of it as your statistical crystal ball: if the current trend were to continue linearly, here's where price 'should' be next. Great for forecasting short-term direction, building adaptive channels, or spotting when price deviates from its expected path.
Table of Contents
How TSF Works – Regression With a Forward Leap
Simple extension of linear regression:
- Fit least-squares line over last N bars: price = slope × index + intercept.
- Current regression endpoint = value at newest bar (index N).
- TSF = endpoint projected forward (usually index N+1): TSF = slope × (N+1) + intercept.
Each new bar recalculates the line and pushes the forecast ahead – a rolling 'expected price' one step into the future.
Many platforms let you set projection steps – 1 is standard, more for longer forecasts.
Reading the Forecast Line
Key signals:
- Price > rising TSF: Strong momentum – price beating expectations.
- Price < falling TSF: Weakness – failing to keep projected pace.
- Price hugging TSF: Trend on autopilot – steady continuation.
- Price crossing TSF: Potential shift – deviation from expected path.
Because it's forward-looking, TSF often leads price slightly in trending markets.
Practical Trading Setups
Proven ways to use it:
- Trend continuation filter: Only take longs when price > TSF and TSF rising; shorts when below and falling.
- Deviation plays: Price far above TSF in uptrend → overbought, consider profit-taking; far below → potential bounce.
- Forecast channel: Plot TSF ± k×standard error or ATR for dynamic future S/R bands.
- Crossover trigger: Price crossing above falling TSF → early reversal warning.
Pair with volume – beating forecast on strong volume = conviction.
Tuning the Look-Back and Projection
Parameters matter:
- Short N (10–30): Responsive forecast – good for intraday, but noisy.
- Medium N (40–80): Balanced swing projection – reliable continuation reads.
- Long N (100+): Smooth macro forecast – filters noise on higher timeframes.
- Projection steps: 1 for tight, 3–5 for longer-term 'target' lines.
Strengths and Realistic Limits
The Wins
- Forward-looking edge – anticipates continuation before price confirms.
- Statistically clean – pure least-squares projection.
- Versatile for channels, deviation trades, and trend filters.
Limitations
- Assumes linear continuation – curved or reversing markets mislead.
- Sensitive to N and outliers in the window.
- Still lags major regime shifts – forecast based on past trend.
Your TSF Setup Checklist
- Match N to timeframe and asset volatility.
- Plot alongside current regression line for context.
- Test deviation and crossover rules historically.
- Add momentum/volume confirmation – avoid blind faith in forecast.
- Use for bias and targets, not standalone in choppy ranges.
Key Takeaways
TSF extends the regression line forward – your statistical 'expected price' tomorrow.
Price beating rising TSF = strong trend; lagging = potential weakness.
Great for continuation filters, deviation plays, and projected channels.
Tune N carefully – shorter for speed, longer for calm.
Combine with confirmation tools – let TSF guide your expectations while managing risk tight. Stay projected and trade smart!
Related Terms
Apply This Knowledge
Ready to put Time Series Forecast (TSF) into practice? Use our tools to analyze your portfolio and explore market opportunities.
This content is also available on our main website for public access.